Browsing CategorySports Law

The most common argument that professional leagues and team owners made in opposition to the legalization of sports betting is that sports betting would ruin the integrity of the game. Billions of dollars are wagered on sports illegally without sports being tainted, so this claim largely was a public relations move. Recently, with the United States Supreme Court looking at whether theProfessional and Amateur Sports Protection Act of 1992 (PASPA) is constitutional, team owners and league commissioners are softening their stances on sports betting or actively pursuing its legalization.

Dallas Cowboys owner Jerry Jones said:

Jerry Jones on the sports betting issue and the Supreme Court, "I don't see that gaming compromises the integrity of the game." https://t.co/2PVVv69HdX

NBA Commissioner Dan Silver said in 2014 that he was in favor for the legalization of sports betting. In 2016, former NBA Commissioner David Stern, who was steadfast against the legalization of sports betting when he was the active commissioner, has since changed his mind saying, “Over time, I’ve come to accept the notion that a properly run gambling operation, or gaming as we like to say in Las Vegas, is protective and not deleterious to the health of sports.”

Ringside Analysis:

The NFL had to come to terms with sports betting most recently when the Raiders decided to move from Oakland to Las Vegas. Goodell and other owners had been against a NFL team in Vegas because of the obvious connections to sports betting. But even leading up to the official announcement Goodell’s stance on sports betting seemed to soften. He said that there would be a benefit to regulating sports betting, which would only happen the way he discussed it if it were legalized nation-wide, even though the league still opposes sports betting. The NFL will also not ask for sports books to not take bets on Raiders games. A canary in the coal mine moment was when ESPN was able to post betting lines on NFL games. That may not seem like a big deal but the NFL once pulled media as part of an effort to get ESPN to cancel a show called “Playmakers” that painted professional football in a fictitious league as detrimental to the NFL.

A tribal government trade and lobby group has been formed to prepare Native American casinos for the legalization of sports betting. Many Native American casinos are worried that the repeal of the Professional and Amateur Sports Betting Act (PASPA) will harm the total revenue that their gaming creates and then redistributes to Native American tribes.

The chairman of the National Indian Gaming Association, Ernie Stevens, believes that the regulation and implementation of sports betting could be a states rights issue. In PASPA there are exceptions for states that had legal sports betting before the act became law. It is possible that this goes back to being a state’s issue rather than replacing PASPA with a federal regulatory law. As Dave Palermo points out, Indian tribes also need to have their own discussions amongst themselves on what regulations and practices they will put in place if PASPA is repealed.

Ringside Analysis

Native American casinos are subject to state law and tribal-state compacts as part of the Indian Gaming Regulatory Act. A federal repeal of PASPA may change the way commercial casinos operate because they fall under federal law while also putting Indian casinos at a disadvantage. By not having sports betting, the Indian casinos could be without the biggest draw a casino could offer.

One of the most important assets Native American tribes have is the ability to have their own casinos as a way to generate revenue for their own tribes. I’m sure that some of the tribes’ leaders are concerned that the tribes could miss out on the first mover advantages and maybe lose out on a golden opportunity to get ahead of the rest of the commercial casinos.

Conor McGregor is only a few weeks away from the richest fight of his career and is now supposedly going to speak to Congress about extending the Ali Act to MMA Fighters. Congressman Markwayne Mullin has been told by Conor McGregor’s team that McGregor is going to go to Capitol Hill and advocate for passing a bill that would help give greater transparency to the financial information in MMA in order to better protect MMA fighters.

The Ali Act was passed in 2000 and is designed to help protect fighters through financial transparency, tighter regulations, and help maintain the integrity of the sport. One of the cornerstone parts of the Ali Act is that it protects fighters from “coercive contracts.” Other key parts are aimed to separate promoters from the managerial process of the sport. Boxing has rankings determined by independent commissions and promoters are not able to have a “direct or indirect financial interest in the management of their fighters.

Ringside Analysis:

UFC COO Lawrence Epstein gave commentary on the article written by Telegraph Sport. Epstein says that the UFC exceeds any requirements when it comes to the health and safety of fighters, which is certainly true. The UFC uses USADA for testing for performance enhancing drugs in athletes, which boxing as a whole does not, (Although some fighters require that their opponents undergo extensive testing with USADA) and the UFC has invested millions into a new performance training center near corporate headquarters in Las Vegas to help reduce the number of injuries that fighter sustain during training.

The Federal Trade Commission (FTC) has blocked the merger between Draft Kings and FanDuel. Draft Kings and Fan Duel are the two largest daily fantasy sports providers. If the two companies did merge the new company would control more than 90% of the daily fantasy sports market.

“This merger would deprive customers of the substantial benefits of direct competition between DraftKings and FanDuel… The FTC is committed to the preservation of competitive markets, which offer consumers the best opportunity to obtain innovative products and services at the most favorable prices and terms consistent with the provision of competitive returns to efficient producers.”

According to the FTC release, Draft Kings is the larger of the two companies. While there are other companies in the daily fantasy sports industry, Draft Kings and FanDuel are the only significant players and merging the two would violate antitrust laws. The FTC argues that the lack of competition would be detrimental to customers as a direct result of the near monopoly.

An administrative trial is scheduled for November 21.

Ringside Analysis:

Draft Kings and FanDuel spent a reported $750 million marketing themselves in the fall of 2015 alone. The competition was so fierce at the beginning that when it came time to fight the legal battles in states that questioned daily fantasy sports legality the costs became significant. There was certainly an opportunity to cost to competing against each other for consumers in order to gain first-mover advantages. The legal ambiguity of daily fantasy sports is what prompted the two companies to start working together and lobbying for the approval of daily fantasy across every state questioning it.

The key argument around the merger appears to be how the companies and FTC define the market. The two daily fantasy sports company argue that other companies like ESPN and Yahoo are the biggest competitors in fantasy sports and that the daily fantasy sports only represents a smaller niche within fantasy sports. However, the government argues that the season-long fantasy provided by companies like ESPN and Yahoo are different and not a “meaningful substitute” for daily fantasy sports.

Golden Boy Promotion’s $300 million lawsuit against Al Haymon and the Premier Boxing Champions (PBC) for allegedly violating antitrust laws and the Muhammad Ali Boxing Reform Act was dismissed by a federal judge. The case, which began in May of 2015, ended when summary judgement was granted by the judge. The lawsuit was centered on Al Haymon attempting to monopolize boxing and violating the Muhammad Ali Act.

The Muhammad Ali Act requires that fighter managers and promoters be separate individuals in an effort to keep fighters from being taken advantage of. Al Haymon works as a manager for many fighters and the lawsuit alleges that Al Haymon is serving as the promoter and manager for fighters, using the local promoters as a way to circumvent the Ali Act. However, no fighter had said that they were pressured or coerced into selecting a certain promoter. In fact, Judge Walter cited Haymon’s willingness to work with many promoters as a reason for the case’s dismissal.

Mark Hunt has filed a civil lawsuit against the UFC, Dana White, Brock Lesnar, alleging racketeering, fraud, breach of contract, negligence, and others. Mark Hunt lost by decision to Brock Lesnar in the co-main event at UFC 200. After the fight it was revealed that Lesnar had failed two drug tests from samples taken before UFC 200. The lawsuit was filed in Nevada District Court.

UFC athletes need to be eligible to be tested by USADA four months before their first fight. Lesnar was given an exception by the UFC to the USADA testing process so that he could participate in UFC 200. Brock Lesnar had failed drug tests while he was at the UFC before becoming a professional wrestler full-time. The Nevada State Athletic Commission fined Lesnar $250,000 from his $2.5 million purse. Lesnar was also suspended for a year. Hunt believes that the punishment for doping should be much more arguing that the punishments are currently too low to deter people from doping.

The Mixed Martial Arts Athletes Association (MMAAA) has announced its entrance into the efforts to unionize UFC fighters. The association is led by fighters Georges St.-Pierre, Tim Kennedy, Cain Velasquez, Donald Cerrone, and TJ Dillashaw with former Bellator owner Bjorn Rebney in an advisory capacity.

Lawyers representing former UFC fighters who are suing the promotional company for violating anti-trust laws are seeking to depose Dana White and other UFC executives. The case is currently in discovery, which means the two legal teams are interviewing stakeholders in the lawsuits and exchanging any other information relevant to the case. The article, which is behind a pay wall, also mentions that the executives at WME-IMG may also be deposed.

United States Representative Frank Pallone Jr. said that the current federal laws pertaining to gambling are “obsolete” and believes that they need to be updated. A congressional committee is reviewing current federal gambling laws in order to introduce new legislation that would include daily fantasy sports.